AMRIT BALA-/ vs NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY

A complaint has been received from one Ms. Amrit Bala charging the respondent namely, New Okhla Industrial Development Authority (Noida) for having adopted and indulged in unfair trade practices covered under Section 36B(a) of the Monopolies and Restrictive Trade Practices Act, 1969 (Act in short) in terms of not handing over the possession of the flat within the stipulated period inspite of paying 85% of the cost of the flat.

THE complainant has also filed an application under Section 12-A of the Act praying therein to pass interim injunction order restraining the respondent from cancelling the allotment of flat No. D-4, in Block No. C-75, Sector-34, Noida till the conclusion of the enquiry. The applicant has also filed a compensation application under Section 12B of the Act praying therein for compensation on account of losses and damages suffered at the hands of the respondents. As both the matters are cognate arising from the same cause of action and relating to the same trade practice, they are taken up together and are disposed of by a common order.

For proper adjudication of this enquiry, it would be worthwhile to summarise the contentions of the complainant/applicant as alleged in his aforesaid applications.

NEW Okhla Industrial Development Authority (Noida), which is engaged in the development of industrial and residential flats, invited applications from general public for allotment of flats in its Mid-Town Unique Apartments during October-November, 1989. The complainant/applicant applied for a residential flat in the Nilgiri-III scheme and deposited registration money to the tune of Rs. 62,500/- vide Bank Draft No. 536600-110002048 dated 7.11.1989, which was acknowledged by the respondent vide its receipt No. 23 dated 7.11.1989. According to the brochure, the estimated cost of the flat opted for was Rs. 6,25,000/- and period of completion of flat was 2 years. There were three options available for payment of price of apartments namely, Mode A, Mode B and Mode C.

THE respondent allotted a flat in Nilgiri-III to the complainant and demanded a sum of Rs. 1,25,000/-, which was deposited by the complainant and the respondent issued receipt No. 152946 dated 23.8.19990. THEreafter, the respondent kept on asking for money and the complainant on 20.9.1991 deposited a sum of Rs. 3,30,000/- vide receipt No. 158672 dated 21.9.1991. Hence the complainant upto 21.9.1991 deposited a total amount of Rs. 5,17,500/- (85%) towards the cost of the flat with the hope of getting the possession of the flat in near future. On personal enquiry, the complainant was astonished to know that there was no progress in the project on account of some dispute going on between the respondent and the contractor and the entire work has been delayed for an indefinite period. Seeing the state of construction, the complainant did not make payment of the remaining two instalments because as stipulated in the brochure the flats were to be handed over within 2 years and even after 2 years of registration, there was no progress. After a lapse of about 4 years, the respondent sent allotment-cum-possession letter dated 21.4.1995 to the complainant informing him that a Flat No. 4-D in Block C-75, Sector 34, Noida has been allotted to her on lease for a period of 90 years and demanded an amount of Rs. 2,63,440 + non-judicial stamp papers of Rs. 78,690/- + Rs. 50/- for execution of legal documents required in connection with handing over the flat. The complainant did not deposit the aforesaid amount, since according to her the actual balance payable was in the range of Rs. 99,500/- only, which was not paid by 25th September, 1991. The complainant alleged in her application that the respondent did not complete the construction of the flats within the stipulated period of 2 years from the date of allotment vide their letter dated 26.7.1990 as specified in their brochure. She further alleged that the respondent had enjoyed her investment of Rs. 5,17,500/- over the last five years and if the respondent are to be paid about Rs. 3 lakhs for a belated payment of Rs. 1 lakh, then she is entitled to proportionate return on her investment also. She further alleged that the policies framed by the respondent are one sided and are against the complainant and the public and deserves to be controlled.

THE respondent issued a show cause notice dated 31.8.1996 with a threat to cancel the flat in question if the amount demanded is not deposited within 21 days.

LEFT with no other alternative, the complainant approached this Commission vide her aforesaid applications. The Commission in turn issued Notice of Enquiry to the respondent under Sections 36A, 36B(a) and 10(a)(i) of the Act summarising the allegations levelled in the main complaint. After hearing Mr. K. Balgopal, Advocate for the complainant on Section 12A application, the Commission vide its order dated 25.9.1996 restrained the respondent from taking any hostile action against the complainant by cancelling the already allotted flat No. D-4, Block No. C-75, Sector-34, Noida in the Neelgiri-III flats of the respondent, which was allotted in the year 1990, and accordingly the operation of the Annexures ''E'' and ''F'' was stayed till further orders.

In its reply filed in the Commission, the respondent has taken preliminary objection to the issuance of the Notice of Enquiry on the ground that the Commission has no jurisdiction in view of Clause 10 of the Brochure which provides that "In the event of any dispute the jurisdiction will be of Ghaziabad Courts and the High Court of Judicature at Allahabad".

IT admitted that the complainant has applied for allotment of Nilgiri-III apartments and deposited the registration money - Rs. 62,500/- + allotment money - Rs. 1,25,000/- but she failed to deposit the required I, II, II, IV and V instalments which were payable on 25.9.1990, 25.11.1990, 25.1.1991, 25.3.1991 and 25.5.1991. The respondent further submitted that the complainant vide her letter dated 16.8.1991 informed the respondent that she wanted to avail loan facility from LIC. Accordingly mortgage permission was granted to her and ''No Objection Certificate'' was issued to her subject to the condition of depositing the instalments alongwith interest within 30 days failing which the NOC would be withdrawn. The complainant deposited an amount of Rs. 3,30,000/- on 16.9.1991 out of Rs. 4,12,370/- calculated upto 15.9.1991 i.e. amount on account of the instalments which had fallen due by that time and interest thereon. The respondent further admitted issuance of Memorandum of allotment-cum-possession letter dated 21.4.1995 to the complainant and the amount demanded therein. The complainant requested for waiver of interest on delay in making payment on the ground that the respondent authority took more time to construct the flat in question but the respondent rejected the request in view of the express terms of the contract between the parties as stipulated in the brochure. IT also admitted that the construction of the flats was delayed on account of some dispute between the Project Management Consultant for the respondent authority and the contractor. Finally, the flats were completed by April, 1995 and the complainant was asked to make the payment and execute legal documents. The respondent on the request of the complainant allowed a period upto 31.10.1995 to make the payment of demanded amounts. In view of the foregoing, the respondent has not indulged in any restrictive or unfair trade practice and it had demanded money as per conditions stipulated in the brochure. Accordingly, the complaint may be dismissed with costs.

AFTER completion of the pleadings in both the cases, the following issues were framed : (1) Whether the respondent has indulged in the unfair/restrictive trade practices as alleged in the NOE ? (2) Whether the said trade practices are not prejudicial to consumer, consumers or to public interest ? (3) Relief, if any ? Both the parties agreed that UTP enquiry and the C.A. enquiry may be clubbed together and the evidence may be common in both the cases. In addition to the issues already framed in the UPT case on 27.8.1997, the following issue was framed as existing Issue No. 3 and the existing Issue No. 3 was renumbered as Issue No. 4 : "3. If so, whether the complainant/applicant has suffered any loss or injury due to the aforesaid unfair trade practices and whether the applicant is entitled for any compensation."

The complainant/applicant being bed-ridden was allowed to substitute her affidavit with the affidavit of her husband Shri Narendra Pal Verma, who furnished his affidavit in evidence alongwith supporting documents and was cross-examined by the Advocate for the respondent. The respondent in turn filed its evidence by way of affidavit of Shri S.C. Pupreja, Manager of the respondent authority, who was cross-examined by the Advocate for the complainant/applicant.

I gave a hearing to Mr. K.N. Balgopal, Advocate for the complainant/applicant and Mr. Astinder Kumar, Advocate for the respondent.

THE preliminary objection taken by the respondent in their defence was neither articulated nor pressed at the time of arguments. But it is obvious that Noida being a creation of the U.P. Industrial Development Act, 1976 is a Government undertaking owned or controlled by the Government. In view of the fact that such undertakings have been brought under the ambit of the MRTP Act by the Central Government by its Notification No. GSR 605 (E) dated 27.9.1991 under Section 3 of the MRTP Act, there is no force in the said preliminary objection of the respondent. The whole controversy in these two cases boils down on the issue whether the complainant/applicant is liable to pay interest on the remaining 2 instalments when her money to the tune of Rs. 5,17,500/- is lying with the respondent since September, 1991, by which time the flat in question should have been completed as per para-26 at page-25 of the Brochure.

In the aforesaid context, after analysing the material placed on record and arguments advanced by the rival parties, I find that the flats, which ought to have been ready by 1991 were not ready till 1995. A mere blanket statement made in the counter-affidavit of the respondent at para-8 is that on account of a dispute between the Project Management and the contractor, there was delay in construction of the flats. There was no proper explanation of the kind of dispute even during the cross-examination of the respondent''s witness. This cannot be a force major or because of any circumstance beyond the control of the respondent authorities and tantamounts to negligence which resulted in not making available the promised flat within the reasonable time. Hence, it is established that the respondents have indulged in unfair trade practice within the meaning of Section 36A of the Act, which are prejudicial to the interest of the complainant. Accordingly, I pass a cease and desist order directing the respondents not to indulge in the unfair trade practices as alleged in the Notice of Enquiry.

DESPITE the breach of contract committed by the respondent as aforesaid, it has illegally demanded Rs. 2,63,440/- including penal interest against the actual balance of about Rs. 1 Lakh vide their letter dated 20.5.1995. Here in this case, I find that the respondent failed to honour its commitment of handing over the flat in 2 years'' time. The huge money of the complainant was blocked. If the respondent is entitled to interest as per provisions contained in the brochure then complainant/applicant is also entitled to interest on the amounts deposited by her and retained by the respondent from 1991 to 1995. On weighing the rival claims, I find that the Commission would have awarded interest @ 18% if the complainant/applicant had asked for refund of the deposited amount. Roughly calculating the interest due to the respondent as asked for and the interest, which would have become due to the complainant/applicant if asked for, the interest accrued on the deposits made by the complainant/applicant would have been more. Hence the balance of convenience tilts towards the complainant/applicant.

IN the circumstances, I direct the complainant/applicant to deposit the amount actually due on 21.9.1991 (after paying Rs. 5,17,500/-) alongwith interest on late payment of instalments till that date + non-judicial stamp of Rs. 78,690/- + Rs. 50/- for execution of legal documents within 4 weeks from the date of this order. The respondent on receipt of the aforesaid amounts from the complainant/applicant shall execute the legal documents and hand over the possession of the flat in question within 4 weeks thereafter. The complainant/applicant in her application for compensation has prayed for losses suffered on account of conveyance, mental agony and harassment to the tune of Rs. 1 lakh. I am not in favour of awarding such huge compensation on these counts in the light of aforesaid directions. However, I award Rs. 10,000/- towards mental agony and cost of case. The respondent is directed to pay the aforesaid amount within 8 weeks from the date of this order and also file an affidavit in compliance within the same time frame. NOE disposed of.